among local public service companies as he supposes. It is easy to let one's impression of the general profitableness of such undertakings be derived from a few conspicuously successful examples. Looking at the general run of the cases in the reports of state commissions, one's impression of the facts is not far out of line with that given by the Commissioner of Labor's report. The theory of monopoly price has no bearing upon the matter, for that theory assumes the most important variable — the amount of the investment in fixed capital - as a given quantum.

No rules of rate regulation can be applied without making some exceptions. There are cases where the rigid application of any general principles would have to be somewhat tempered, just as there are cases where obvious extortion in the past might properly be taken into account. But for the most part principles for the valuation of properties which were installed under conditions of risk taking, and sometimes of potential destructive competition, must be general in their application. We can neither penalize past success nor make compensation for past failure. Our rules must be shaped with reference to the normal or most numerous cases. I suspect that it is possible that Mr. Davis might agree with me in upholding Mr. Allison's contention if he shared my view as to the degree in which the absence of depreciation charges has tended to increase the ratio of investment to gross earnings in the case of the average public service company.

ALLYN A. YOUNG.

REVIEWS

THE ECONOMIC SYNTHESIS

YEARS ago Loria expressed his dissatisfaction with the generalizations which economists presented as scientific laws. He found them nothing more than more or less perfect abstractions from transitory phenomena," " while that which he sought was "the true economic law, immutable, independent of space and time, and therefore filling all the requirements of a scientific law." The present book on the Economic Synthesis,1 which he describes as "the complement and the theoretic crown" of all his earlier work, embodies his attempt to break the bonds which have fettered other writers. "The Egyptian statue, rigid in its outlines, and with the hands attached to the knees, was succeeded by the Greek statue, animated and alive." So in the field of economic thought the author believes that beyond the imperfect generalizations of his predecessors there lies "a synthesis scientific and positive in character, at once static and dynamic," and this synthesis he has here endeavored to achieve.

With the author's aim we may have much sympathy. Any one who works in the fields both of economics and history must gain the conviction that, on the one side, the laws of modern economics are partial and very fragmentary statements of the whole truth, while on the other side the facts of history invite generalizations of commanding importance, which promise to give significance to the minor laws. Further, it seems to me that Loria indicates in his introduction the only right way toward a satisfactory interpretation of

1 The Economic Synthesis. the Italian by M. Eden Paul. 368. $3.

A Study of the Laws of Income. Translated from New York, The Macmillan Company, 1914. Pp. xii,

economic phenomena in their historical development when he presents them not as things technical and apart, but as merely special aspects of a complex whole, and intelligible only in the light of a social theory. The economists may, if they please, rail at the sociologists, but they should recognize that economics is meaningless except as part of a broader social science. So great indeed, is the need of this new science of society, which shall cover things ethical, legal, economic and political, as well as many others, and which shall be neither a collection of "dessicated anthropological anecdotes," to borrow H. G. Wells' description, nor yet a web of vague abstractions, that contributions to it should be heartily encouraged, and should be judged most charitably. This new field is so vast and difficult that pioneers in it must inevitably stray and stumble. Yet the report of every explorer will be of service if it narrates truly what he saw in the undiscovered country, and describes his route accurately, that others may follow it and make it the starting point of fresh investigation. Leaving the metaphor, the scholar who proposes a new theory of social development must be an attentive and impartial observer of fact, and must be logical in his generalization, else he wastes the time of himself and others. Loria appears to me, in his handling both of theory and of history, to fall below a fair standard of professional competence. I shall not attempt to describe or to criticize the book in detail, but shall seek merely to indicate some of the faults which make it not worth the reading.

As Loria's book is devoted to the determination of "The Laws of Income " the reader wants, first of all, to know what the author means by income. A statement on page 29 appears, by its form and emphasis, to be offered as a definition: "the surplus product of coercively associated labor, after there has been subtracted from that product what is required for the redintegration and increase of the subsistence of the laborers and of the technical capital, constitutes income." Disregarding for the present that element of the concept which restricts it to a certain form of organization ("coercive association ") the feature which strikes one most

is the division of the social product, of which part only is income. The term income, as used by Loria, departs in its very conception from the conventional idea of a colorless mathematical total; it has a social significance, it suggests the contrast between the beati possidentes and the rest of us. Now let us admit, candidly, that this brings to the forefront a question which has been of the most absorbing interest in all ages. Let us admit further that this question is one which conventional economics has been and always will be incompetent to solve. Sympathize as we may with Loria in his quest, I do not see how any reader of the book can feel that he has done more than to pass the socialists on a false road, on which they have recently been retracing their steps. He fails, as they have done, to distinguish in history any influences which have fixed the returns to laborers at a point capable of precise objective definition. He does not even attempt to develop a theory of population, to supplement the theory of land monopoly which he has presented in earlier works. His definition itself wavers in the face of facts.

Subsistence appears first as "required," "necessary, "bare"; it" is a precise quantity"; then it is "quasi fixed," it "remains unaltered or nearly so "; it "does not of necessity coincide with the strict necessaries of life "; we are asked to consider cases in which subsistence diminishes, and other cases in which it increases until it "at length annexes a certain share of income "; finally, we are told of processes, of the first importance in the workings of the economic system, by which subsistence is "artificially" lowered to keep laborers from the land, and by which, in the conflict between subsistence and income, "in the last resort, the arbiter in the contest is income, and [that] subsistence becomes established at that point which gives the maximum permanent income.”

"No more logical demand can possibly be made," writes Loria on one of the early pages of his book, "than that we should distinguish clearly between subsistence and income, defining the latter as that part of the net product which remains after subtracting the subsistence of the laborers." The reader, ignorant as yet of the way in which the definition

of subsistence is going to fail him, starts hopefully only to plunge immediately into an obscurity from which he will never emerge. A discussion of the relation of capital and income, which seems academic, leads to the conclusion that "if that part of the product which should go to redintegrate the technical capital and the subsistences, is produced and consumed instead in the form of articles of consumption which, from the nature of the case, are not periodically reproduced, it is not income." The relatively simple concept of income, as the surplus product of coercively associated labor, is modified in many ways. Wealth, whatever may be its origin, which passes to unproductive members of society, such as thieves, gamblers, or beggars, is not income. "The income of the owner of a house which is rented by laborers, the income of a retailer, a money-lender, or a doctor, being the incomes derived from the slender purses of the workers, represent a quantity of wealth taken from subsistence to be transformed into income; in other words it no longer represents a simple transference of pre-existent income from one individual to another, but a positive increment to the total income." Unclaimed inheritances" continue to produce an income, although there is no recipient." Incomes are "deposited in a bank." The quantity of incomes produced in a nation" is determined by the quantity of capital productively employed, by the quantity and productivity of the land, by the quantity of public or private securities issued."

Some of this elaboration of the concept of income is harmless, tho it is relatively useless for the purposes of an author who seeks to rise above the limitations of space and time. On the other hand, the constant shifting in the meaning of such terms as subsistence and income tempts Loria constantly to choose in any particular case the meaning which best suits the purpose of his argument; and makes the book interesting throughout as an example of faulty logic rather than as a contribution to knowledge. It seems a pity that Loria, who in referring to Marx uses the terms surplus-value and income as interchangeable and appears, therefore, to recognize the likeness of his concept to that of the socialists, should take up